As Tesla Board Circles the Wagons, Report Claims Musk Backed Out of SEC Settlement

as tesla board circles the wagons report claims musk backed out of sec settlement

Yesterday’s end-of-day fraud lawsuit filed against Tesla CEO Elon Musk by the Securities and Exchange Commission needn’t have happened, CNBC reports. The CEO and founder turned down a settlement deal that would have seen him pay a “nominal” fine and remove himself as chairman, sources claim. Instead, Musk did what he does best. He went his own way, greatly increasing risk both to himself and his company.

Still, Tesla’s board stands by its man, releasing a statement late Thursday to this effect. According to Bob Lutz, outspoken industry titan, the board should have told Musk to hit the bricks.

Had Musk signed on to the settlement, he wouldn’t have had to admit guilt for tweeting “funding secured” on August 7th, part of an ultimately ill-fated attempt to take Tesla private. The settlement would, however, have kept Musk from the chairman’s position for two years, while compelling the automaker to hire two independent directors.

“This unjustified action by the SEC leaves me deeply saddened and disappointed,” Musk said to CNBC. “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

Says the man who accused a British rescuer he’s never met a “pedo” on Twitter, apologized, then called him a “child rapist” and dared him to sue, eventually getting his wish. It’s hard to ignore recent controversies at times like this, and Musk’s tendency for spur-of-the-moment social media bozo eruptions certainly doesn’t help his case.

In its lawsuit, the SEC claims Musk mislead investors and failed to inform the Nasdaq when he tweeted, in the middle of a trading day, his plan to take Tesla private at $420 a share. Yes, it turns out that is a drug reference. Interest expressed by Saudi Arabia’s sovereign wealth fund apparently led Musk to believe the money would be there when he needed it. That potential funding wasn’t as secured as the CEO claimed. Musk abandoned the go-private bid on August 24th.

In a statement, Tesla’s board wrote,”Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful U.S. auto company in over a century. Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees.”

Feel free to discuss that awkward “over a century” line.

Should a judge rule in the SEC’s favor, Musk won’t just be gone from the chairman’s seat. The agency wants Musk barred from serving as the director of a public company. Tesla’s stock dropped more than 11 percent in early Friday trading.

If it was left up to Bob Lutz, Tesla’s board would thank Musk, then tell him to step down. The company is a “disastrous mess,” Lutz said while appearing on CNBC.

[Image: Tesla]

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  • Mcs Mcs on Sep 29, 2018

    They've settled. Apparently, he's going to step down as chairman of the board and can't run again for 3 years. He can remain CEO. He has to pay a $20 million fine.

  • Art Vandelay Art Vandelay on Oct 01, 2018

    5 Years from now: The new Tesla S...Available at your Lincoln Motor Car Store or Cadillac dealer.

  • Inside Looking Out Why EBFlex dominates this EV discussion? Just because he is a Ford expert?
  • Marky S. Very nice article and photos. I am a HUGE Edsel fan. I have always been fascinated with the "Charlie Brown of Cars." Allow me to make a minor correction to add here: the Pacer line was the second-from-bottom rung Edsel, not the entry-level trim. That would be the Edsel Ranger for 1958. It had the widest array of body styles. The Ranger 2-door sedan (with a "B-pillar", not a pillarless hardtop), was priced at $2,484. So, the Ranger and Pacer both used the smaller Ford body. The next two upscale Edsel's were based on the Mercury body, are were: Corsair, and, top-line Citation. Although the 1959 style is my fav. I would love a '58 Edsel Pacer 4-door hardtop sedan!
  • Lou_BC Stupid to kill the 6ft box in the crewcab. That's the most common Canyon/Colorado trim I see. That kills the utility of a small truck. The extended cab was a poor seller so that makes sense. GM should have kept the diesel. It's a decent engine that mates well with the 6 speed. Fuel economy is impressive.
  • Lou_BC High end EV's are selling well. Car companies are taking advantage of that fact. I see quite a few $100k pickups in my travels so why is that ok but $100k EV's are bad? The cynical side of me sees car companies tack on 8k premiums to EV's around the time we see governments up EV credits. Coincidence? No fooking way.
  • EBFlex "I'd add to that right now, demand is higher than supply, so basic business rules say to raise the price."Demand is very low. Supply is even lower. Saying that demand is outstripping supply without providing context is dishonest at best.